Many people don’t have money. Moreover, many people are careful what they spend money on, because there are many seemingly-useful services; while a news subscription doesn’t cost much, if they spent money on everything that seemed as useful, it would be a lot.
Presumably many people want others to be informed (and want local news to exist in general), some of whom do have money. Maybe the news could introduce a way for those people to pay extra, where the extra proportionally lowers the price for everyone else. If enough people pay enough extra, the baseline price would $0, then the news would be freely available online and maybe distributed in paper. Also make it a trend to post gift codes to social media for people who are desperate or thrifty.
If lies are free than the truth has to be to. In moderate-sized cities there is not enough news to justify a daily paper but weeklies and web-based papers have better economics and fill the gap ne can be financed with advertising.
Yet as a whole it's what people seem to choose it time and again.
I choose to pay / support news orgs, software, etc, but most seem to not wish to.